Costs involved when buying a property...

When saving towards a property it is easy to lose sight of all other costs other than the deposit. Below are a list of costs that you should now bear in mind.

MORTGAGE FEES

Arrangement fees for mortgages have risen considerably over the past two years and can cost up to a few hundred pounds depending on the selected product. It is worth being precautious and setting aside at least £250-500. However, many lenders will allow you to add this fee on to your total mortgage so that you do not have to pay the amount upfront. However, bare in mind any extra interest charges.

STAMP DUTY LAND TAX

Stamp Duty Land Tax is charged on land and property transactions in the UK. The tax is charged at different rates and has different thresholds for different types of property. Below is a table for residential land and property. At the moment First Time Buyers only pay Stamp Duty on properties over £250,000.

Purchase price/lease premium or transfer value

SDLT rate

Up to £125,000

Zero

Over £125,000 to £250,000

1%

Over £250,000 to £500,000

3%

Over £500,000 to £1 million

4%

Over £1 million to £2 million

5%

Over £2 million from 22 March 2012

7%

Over £2 million (purchased by certain persons including corporate bodies) from 21 March 2012

15%

LEGAL FEES

A Solicitor or Conveyancer will sort through a majority of the legal documents, they will check ownership of the property and also contact the Land Registry database on your behalf. They will also ensure that the property is not subject to any planning developments and liaise with the buyer, seller and lender to arrange the transfer of the price and details between parties.

Typically the legal fees can cost up to £500+. Other fees such as Land Registry and cost of checks may be additional.

SURVEYS

There are three types/categories of surveys that you can choose when buying a house. Each survey costs a different price.

Valuation Report - £100 + This survey communicates with the lender whether the property you have offered on is suitable for the size of Mortgage you applied for.

Homebuyers Report - £400+(Varies depending on where you live) This survey tells youl of any problems with the property such as subsidence, water damage or damp.

Structural Survey - £500+ This survey is generally carried out on listed building or very old period properties. It is the most expensive out of the surveys and assess the structural stability of the property.